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Saudi govt to tighten up on contracts with foreign firms from 2024

Riyadh - The state news agency said citing an official source.

Published: Mon 15 Feb 2021, 9:44 PM

Updated: Mon 15 Feb 2021, 11:40 PM

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  • Reuters

The government of Saudi Arabia is determined to stop signing contracts with foreign companies with a regional headquarters that is not in the kingdom as of January 2024, the state news agency (SPA) said citing an official source.

The source stressed that this will not affect the ability of any investor to enter the Saudi economy or continue to deal with the private sector, adding that the relevant measures will be issued during 2021.

The policy, which comes into effect on January 1, 2024, is designed to encourage foreign firms to open a permanent, in-country regional presence that would help create local jobs, SPA reported.

"The decision ... will reflect positively in the form of creating thousands of jobs for citizens, transferring expertise, and localizing knowledge, as it will contribute to developing local content and attracting more investments to the kingdom," Minister of Investment Khalid Al Falih later wrote on Twitter.

Foreign firms have for years used neighbouring United Arab Emirates as a springboard for their regional operations, including for Saudi Arabia.

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The Saudi policy will apply to government agencies, institutions and funds, the source was quoted as saying, with new regulations to be issued this year.

Once it comes into effect, it would increase efficiency of state spending, help keep capital within the country and guarantee the main goods and services purchased by the government were of local origin, SPA said.

Saudi Arabia Crown Prince Mohammed bin Salman, has pledged to open up the kingdom and diversify its economy under a series of reforms since his father, the king, made him next in line to the throne in 2017.

SPA earlier this month reported 24 foreign companies had announced their intention to open regional offices in Saudi Arabia, including PepsiCo and Tim Hortons.



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